Our  International 
Relations  and 
Russia’s  Lesson  To  Us 


By 

FRED  I.  KENT 

Vice-President,  Bankers  Trust  Company 


AN  ADDRESS 

DELIVERED  BEFORE  THE  CONVENTION  OF 
THE  AMERICAN  BANKERS  ASSOCIATION, 
IN  WASHINGTON,  ON  OCTOBER  20,  1920 


Bankers  Trust  Company 


j!  Downtown  Office 
16  Wall  St. 


Uptown  Office 
5th  Avenue  at  42nd  St. 


Paris  Offices 
9,  Rue  St.  Florentin 
16,  Place  Vendome 


1 HIS  address  was  delivered  by  Mr. 
F red  I.  Kent , Vice-President  of  the 
Bankers  Trust  Company  of  New  York , 
before  the  Convention  of  the  American 
Bankers  Association  in  W ashington  on 
October  20 , 1920 . 

Mr.  Kent  was  director  of  Foreign 
Exchange  for  the  Federal  Reserve  Board 
during  the  war  and  he  spent  last  year 
on  the  Continent , making  his  head- 
quarters in  Paris  and  devoting  much  of 
his  time  to  work  with  the  Reparation 
Commission. 

We  have  republished  this  address  in 
this  form  in  the  belief  that  it  is  timely 
and  that  it  would  prove  interesting  to 
our  friends. 


BANKERS  TRUST  COMPANY 


Our  International  Relations 
and  Russia’s  Lesson  to  Us 


FOOD  and  protection  from  the  ele- 
ments are  all  that  man  requires  to 
exist,  but  to  fulfill  his  destiny  and  grow 
in  mentality  through  the  generations 
human  intercourse  is  necessary.  Even  if 
without  ideals,  human  beings  could  not 
exist  in  present  numbers  if  animal  in- 
stincts represented  their  highest  mental 
development.  As  populations  have  grown 
in  density,  it  has  taken  greater  and  greater 
ingenuity  and  the  further  harnessing  of 
the  forces  of  nature  to  enable  people  to 
live  in  comfort  and  happiness.  In  every 
human  group  from  the  family  through 
the  community,  the  city,  state  or  country, 
the  master  minds  control  either  directly 
or  indirectly.  Unfortunately  a master 
human  mind  can  carry  forces  of  evil  even 
as  those  of  lesser  power,  but  evil  forces 
are  elements  of  weakness,  and  if  not  con- 
trolled will  sooner  or  later  tear  down  and 
destroy  the  power  of  any  mind.  As  a 
family  is  affected  by  the  preponderance 
of  good  or  evil  forces  exercised  within  it, 
so  is  the  community  influenced  as  the 
trend  of  such  forces  is  stronger  for  good 
or  for  evil  among  the  families  which  con- 
stitute it. 

It  is  conceivable  that  if  every  man 
could  exercise  his  will  without  affecting 
in  any  particular  the  will  of  any  other 
human  being,  no  would-be  act  of  any- 
one would  be  committed  which  could 
be  classed  as  wrong.  So  interwoven, 
however,  are  the  lives  of  human  beings 
through  the  families  with  their  growing 

[3] 


children  and  their  communities  that  such 
a condition  is  impossible,  and  no  man  can 
live  his  life  fairly  to  the  world  without 
sacrifice.  Man-made  laws  are  only  neces- 
sary because  of  the  selfishness  and  ignor- 
ance of  humanity.  No  man  can  conscien- 
tiously claim  the  right  of  entire  freedom 
to  exercise  his  will  without  admitting  that 
every  other  human  being  has  the  same 
right.  Every  man  making  such  an  ad- 
mission binds  himself  to  respect  the  rights 
of  others,  and  if  he  does  not  make  such 
admission  it  is  positive  evidence  that  the 
good  of  humanity  does  not  concern  him, 
but  that  it  is  only  his  own  private  will 
which  he  wishes  to  exercise,  even  though 
it  may  be  at  the  expense  of  others.  Prop- 
erly man-made  laws  represent  the  expres- 
sions of  opinion  of  the  people  who  enact 
them  for  their  own  guidance  as  to  wherein 
the  desires  of  certain  individuals  which 
may  affect  the  rights  of  others  must  be 
controlled. 

Peoples  who  are  honest  in  their  national 
life  endeavor  to  choose  for  their  leaders 
those  whom  they  think  will  so  guide  their 
afifairs  of  state  as  to  give  them  the 
greatest  happiness  and  be  the  fairest  to 
all  concerned.  The  least  intelligent  por- 
tion of  a population  is  more  easily  led 
through  appeals  to  the  passions  than 
through  reason.  Such  appeals  are  essen- 
tially dishonest,  as  the  force  which  is 
being  striven  for  is  not  of  right,  but  of 
the  power  of  numbers.  To  arouse  the 
passions  of  a people  requires  neither  in- 
telligence nor  ability,  and  cannot  carry 
with  it  honesty  or  a proper  sense  of  re- 
sponsibility. It  is  the  means  used  by 
the  cheap  politician,  the  cheap  thinker  and 
the  vicious  to  obtain  their  desires.  Such 
methods  often  win,  but  victories  under 
them  are  short-lived,  as  they  are  in- 

[4] 


evitably  followed  by  the  suffering  of  the 
people. 

It  is  manifestly  impossible  for  every 
individual  to  have  a direct  voice  in  pass- 
ing upon  the  regulations  of  the  govern- 
ment to  which  he  submits  as  a citizen. 
Density  of  population  would  prohibit 
town-meeting  government,  even  if  it  were 
the  most  effective,  which  it  is  not.  In 
the  case  of  such  government,  however, 
individuals  would  have  to  be  appointed 
to  carry  out  the  will  of  the  mob.  Repre- 
sentatives of  a democratic  people,  there- 
fore, selected  in  some  manner  by  the 
people,  whether  intelligently  or  other- 
wise, will  determine  government.  People 
as  such  are  impotent  as  masters  of  their 
own  government  until  abuses  of  those  in 
power  have  been  carried  to  such  extremes 
that  general  suffering  ensues,  because 
what  is  everybody's  business  is  nobody's 
business,  and  so  two  or  more  parties  can 
be  found  in  nearly  every  group  of  demo- 
cratic people,  the  leaders  of  which  take 
it  upon  themselves  to  criticize  the  acts 
and  principles  of  their  opponents.  This 
when  done  honestly  often  results  in  a 
change  of  some  policy  bad  for  a people 
before  it  could  be  otherwise  brought 
about,  and  before  it  has  led  to  general 
suffering. 

The  best  interests  of  a people  demand 
that  its  government  regulate  and  not 
operate.  Even  though  the  world's  war 
has  proved  this  beyond  any  manner  of 
doubt,  such  is  the  inconsistency  of  human 
nature  that  we  are  confronted  today  with 
doctrines  aimed  to  cure  too  much  govern- 
ment with  more  government,  doctrines 
which  if  allowed  to  be  exercised  would 
result  in  an  autocracy  second  in  vicious- 
ness to  none  which  has  existed  since  the 
beginning  of  the  world's  history. 

[5] 


In  the  Russia  of  today  we  have  an 
example  of  this  situation,  that  is  an  open 
book  for  the  world  to  read.  In  time  the 
lesson  from  it  will  open  the  eyes  of  the 
world,  even  though  at  the  moment  there 
are  many  who  refuse  to  accept  the  facts 
as  they  exist,  because  they  consider  it  to 
their  personal  interest  not  to  do  so.  Rule 
in  Russia  at  the  moment  is  falsely  dig- 
nified by  calling  it  an  experiment  in  gov- 
ernment. It  does  not  represent  to  the 
slightest  degree  the  voice  of  the  people 
or  of  any  portion  of  the  people,  such  as 
labor.  It  is  a mere  tyranny  which  has 
existed  in  the  world  before  in  compara- 
tively smaller  ways  at  innumerable  times 
during  its  history,  and  is  being  carried  on 
solely  for  the  benefit  of  those  in  control 
through  terrorism  and  without  the  slight- 
est regard  to  any  other  human  being  or 
group  of  human  beings.  Its  existence 
over  such  a long  period  has  only  been 
possible  because  of  the  vast  amount  of 
loot  in  all  forms  of  wealth  which  those 
in  control  were  unfortunately  able  to  steal 
at  its  inception.  This  wealth  made  it 
possible  for  these  autocrats  to  hire  the 
master  minds  of  the  underworld  to  be- 
come their  agents  in  every  civilized  coun- 
try. By  this  means  they  have  been  able 
to  spread  a false  propaganda  throughout 
the  world  based  on  a pretended  idealism, 
which  is  not  being  striven  for  in  Russia 
by  intention  nor  desire,  but  that  has  even 
so  been  wonderfully  effective  in  fooling 
multitudes. 

With  the  vast  wealth  of  the  Russian 
government  which  was  taken  over  with- 
out its  liabilities,  the  new  Czars  came 
into  possession  of  the  machinery  for 
manufacturing  paper  money.  While  de- 
crying the  use  of  capital  and  money  in 
any  form  for  purposes  of  propaganda, 

[6] 


they  ran  the  printing  presses  for  Russian 
currency  at  the  highest  speed  within  their 
power,  and  flooded  the  world  with  prom- 
ises to  pay  which  were  never  intended 
to  be  kept.  Knowing  that  currency  is- 
sued over  their  own  signatures  would  be 
accepted  by  no  one,  they  in  effect  forged 
the  signatures  of  the  government  of  the 
former  Czar,  which  they  had  overthrown 
and  repudiated.  Labor  in  many  coun- 
tries of  the  world  was  induced  to  buy 
these  false  promises  as  an  investment, 
attention  being  called  to  the  low  price 
at  which  they  could  be  had  in  relation 
to  the  former  value  of  the  Rouble.  By 
this  means  a further  immense  fund  was 
built  up  in  many  countries  of  the  world, 
which  has  been  used  to  finance  those  who 
are  willing  to  sell  their  souls  and  carry 
on  a propaganda  which,  if  successful,  is 
certain  to  set  the  world  back  many  cen- 
turies, to  say  nothing  of  the  incalculable 
human  misery  which  is  bound  to  follow, 
as  the  condition  in  Russia  today  conclu- 
sively proves. 

The  poor  deluded  people  who  purchased 
these  false  promises  were  not  able  to  see 
that  the  money  which  they  gave  for  them 
was  going  to  be  used  in  such  manner  that 
the  needed  production  of  the  world  would 
be  so  curtailed  that  the  difficulties  of  liv- 
ing would  become  almost  insurmountable. 
Neither  could  they  seem  to  see  how  dis- 
honest, inconsistent  and  impossible  was  a 
human  system  which  while  encouraging  in- 
vestment in  order  to  obtain  money  was  at 
the  same  time  deyning  the  right  of  invest- 
ment to  any  and  all.  The  so-called  Soviet 
Government  ever  since  its  inception  has 
been  ready  to  make  any  promise  to  other 
peoples  where  it  could  obtain  a concession 
in  return,  and  with  no  intention  whatso- 
ever of  living  up  to  any  promise  given 

[7] 


longer  than  was  necessary  to  receive  the 
benefits  of  the  concessions. 

The  Soviet  Government  has  never  been 
honest  with  itself  nor  with  any  peoples  of 
the  world  since  they  stole  the  possessions 
of  the  Russian  people  from  their  public 
and  private  stores,  from  their  banks,  their 
warehouses  and  their  homes. 

Unfortunately  for  the  world,  many  so- 
called  intellectuals  in  every  country,  a body 
of  people  which  is  composed  of  men  and 
women  who  have  real  gifts  in  science,  art 
and  literature,  are  adding  the  weight  of 
their  prestige  to  the  false  mouthings  of  the 
vicious.  The  attitude  of  those  intellectuals 
who  follow  the  teachings  of  the  dishonest 
propagandist  is  found  upon  analysis  not  to 
be  as  surprising  as  it  might  seem.  Their 
livelihood  is  based  upon  gifts  which  are 
exercised  as  a tax  upon  business,  which  has 
a tendency  to  set  their  minds  in  opposition 
to  it.  With  a life  work  not  requiring 
practical  business  knowledge  and  practical 
understanding  of  the  laws  of  economics, 
they  can  easily  be  fooled  by  logic  based  on 
false  premises.  If  a business  man  should 
presume  to  criticize  them  in  any  of  their 
specialized  fields  of  activity,  they  would 
think  that  he  was  crazy  in  claiming  to  be  a 
critic  of  authority  when  he  was  a mere 
amateur  in  the  propositions  under  consid- 
eration. Business  men  look  upon  the  intel- 
lectuals, who  with  a superficial  knowledge 
of  economics  and  industry  would  instruct 
them  how  to  act,  in  exactly  the  same  way. 

The  honesty  of  purpose  among  many  such 
people  is  beyond  question,  but  they  have 
not  the  means,  because  of  their  method  of 
life,  to  be  able  to  differentiate  between 
fundamentals  and  false  premises  in  prac- 
tical things.  They  do  not  appreciate  the 
fact  that  only  a successful  business  world 
makes  it  possible  for  them  to  exist  in  their 
[8] 


callings.  If  it  were  not  for  the  savings  of 
business,  every  man  would  be  obliged  to 
give  his  whole  time  to  the  production  of 
the  necessities  of  life. 

The  expenses  of  scientific  discovery  are 
tremendous,  as  to  the  cost  of  the  successful 
experiments  must  be  added  those  of  the  in- 
numerable failures.  Such  expenses  can 
only  be  met  because  the  business  of  the 
world  is  carried  on  in  such  manner  that 
there  is  something  left  over  after  payment 
is  made  for  food,  clothing  and  shelter  that 
can  go  toward  the  development  of  science. 
The  same  thing  is  true  as  to  art  and  litera- 
ture. A starving  man  must  have  something 
to  eat  before  he  can  enjoy  a wonderful 
painting  of  a good  dinner  or  a well-written 
book  of  any  kind.  That  the  lack  of  practi- 
cal business  understanding  is  common  to 
intellectuals  is  well  known  to  the  crooks  of 
the  world,  and  they  make  the  most  of  it. 
On  the  lists  of  names  which  have  been 
taken  from  the  dishonest  groups  of  men 
who  make  their  livelihood  through  floating 
valueless  securities  are  those  of  doctors, 
preachers,  artists,  professors,  teachers, 
writers,  etc.  The  fact  that  people  of  this 
character  are  constantly  investing  in  false 
securities  naturally  adds  to  their  feeling  of 
criticism  toward  the  business  world,  even 
though  the  putting  out  of  such  issues  has 
absolutely  nothing  to  do  with  business  any 
more  than  the  operations  of  burglars  or 
hold-up  men. 

Another  class  which  preys  upon  the  in- 
tellectuals is  that  of  the  vicious  radicals 
who,  lacking  responsibility  as  to  their  state- 
ments, address  gatherings  of  intellectuals 
and  carry  them  along  with  clever  logic 
based  on  false  statements  of  fundamentals, 
or  they  fill  magazines  and  pamphlets  with 
pretty  word  pictures  so  constructed  as  to 
appeal  to  the  minds  of  the  impracticable. 

[9] 


Again  we  find  ministers  conscientiously 
but  thoughtlessly  inviting  men  and  women 
without  integrity  or  responsibility  to  ex- 
plain their  perverted  theories  to  their  con- 
gregations on  the  plea  of  broadening  their 
education.  It  is  just  as  much  the  duty  of 
a minister  when  inviting  speakers  to  address 
his  men’s  meetings  and  general  gatherings 
to  make  certain  of  their  character  and  in- 
tegrity of  purpose  as  it  would  be  to  shut  a 
man-eating  tiger  out  of  his  Sunday  School. 
It  is  as  bad  for  the  world  to  poison  men’s 
minds  as  to  destroy  their  bodies,  and  when 
a minister  is  himself  willing  to  play  upon 
the  passions  of  his  people  for  the  purpose  of 
making  a name  for  himself,  he  stoops  to  the 
class  of  the  thrower  of  bombs.  In  fact  he 
may  do  more  harm  than  the  anarchist,  for 
the  explosion  of  every  murderous  bomb 
shocks  many  careless  thinkers  into  a recog- 
nition of  the  evil  of  their  attitudes. 

In  order  that  the  full  powers  of  those 
gifted  in  science,  art  and  literature  may  be 
brought  out,  it  is  necessary  that  they  have 
both  the  moral  and  financial  support  of  the 
business  world.  It  is  only  because  men  of 
business  appreciate  their  work,  and  its 
value,  that  those  who  have  such  gifts  are 
able  to  succeed.  It  is  all  the  more  neces- 
sary, therefore,  that  the  intellectuals  should 
endeavor  to  co-operate  with  men  of  busi- 
ness instead  of  siding  against  them.  The 
part  which  the  real  intellectuals  take  in  the 
world’s  progress  is  second  to  none,  and 
they  carry  with  them  the  respect  of  all 
when  the  good  which  they  do  is  not  dissi- 
pated through  association  with  the  ignor- 
ant and  vicious. 

The  word  “Red”  has  been  dangled  about 
the  world  in  such  manner  as  to  lead  cow- 
ards to  think  that  they  can  pose  as  heroes 
by  calling  themselves  “Reds.”  These 
throwers  of  bombs  and  would-be  destroy- 

[101 


ers  of  the  world’s  peace,  and  their  follow- 
ers, are  unfortunately  color  blind.  They 
may  see  red,  but  they  are  not  red,  they  are 
yellow. 

A great  deal  is  heard  these  days  of  in- 
ternationalists, which  without  analysis  is  a 
fair  catchword.  As  far  as  the  world  has 
been  able  to  determine  at  the  moment,  how- 
ever, their  principles  seem  to  be  based  on 
hating  your  neighbor,  but  loving  your  un- 
seen brothers  across  the  sea.  It  would 
seem  as  though  it  was  considered  safe  to 
love  only  those  who  are  far  enough  away 
so  that  it  cannot  become  embarrassing.  It 
may  be  that  as  the  means  of  communication 
between  different  parts  of  the  world  be- 
come closer  and  closer,  as  invention  pro- 
ceeds, that  the  internationalist  of  the  day 
may  find  it  necessary  to  become  an  inter- 
cosmosapalist,  in  order  to  avoid  local  en- 
tanglements. 

The  life  of  man  is  so  constituted  that  he 
can  only  become  a true  citizen  of  the  world 
if  he  first  protects  his  family,  then  his  com- 
munity, and  then  his  state  and  country. 
There  is  no  such  thing  as  allegiance  to  a 
world  without  allegiance  to  one’s  country. 
The  true  selfishness,  begotten  by  love 
and  not  desire,  gradually  extends  as 
man’s  mind  and  heart  grow  from  his 
family  through  all  other  community  or- 
ganizations of  man’s  building  until  ulti- 
mately he  can  see  with  great  clearness 
that  the  good  of  the  whole  world  is  de- 
sirable for  the  benefit  of  his  own  child. 
We  in  the  United  States  of  America  are 
just  beginning  to  find  this  out,  but  it 
means  no  lessening  of  our  love  for  our 
family  or  our  neighbor  or  our  country  if 
we  would  strive  to  benefit  all  mankind. 
In  fact  success  in  such  work  can  only 
follow  through  love  of  country,  such 
strong  love  of  country  that  its  position 
[11] 


before  the  world  as  to  honor  and  integrity 
and  right  dealing  is  jealously  guarded 
with  man’s  every  force,  be  it  great  or 
small.  As  individuals  few  men  can  stand 
before  the  world  with  any  appreciable 
force  for  good,  whereas  the  combined 
force  of  many  men,  through  love  of  their 
own  country  as  exercised  through  their 
country’s  representatives  in  government 
and  commerce,  may  have  a vast  influence 
for  good  on  the  lives  of  those  of  other 
nations. 

In  industry  the  same  principles  follow. 
The  power  of  any  industrial  organization 
increases  with  the  loyalty  of  its  employes, 
whether  they  be  in  official  positions  or 
not.  The  savings  of  many  people  are 
brought  together  and  made  to  work  for 
them  by  investment  in  industrial  under- 
takings. On  such  investments  a double 
return  is  received,  one  through  the  pay- 
ment of  dividends,  and  the  other  through 
increased  production  of  things  which  they 
may  require  or  desire,  or  that  can  be  ex- 
changed for  such  things  with  other  coun- 
tries. The  holders  of  such  interests, 
knowing  that  the  safety  of  their  invest- 
ments depends  upon  the  honesty  and 
ability  of  those  to  whom  they  are  en- 
trusted, endeavor  to  select  for  the  officers 
of  their  companies  those  who  they  believe 
will  make  good.  As  an  industry  develops 
men  are  continually  rising  from  the  ranks 
to  official  positions  as  their  ability  makes 
possible.  There  is  no  doubt  but  that 
here  and  there  mistakes  are  made  and 
sometimes  favoritism  is  shown,  but  this  is 
something  that  will  be  true  in  every 
human  organization  as  long  as  the  heart 
and  mind  of  man  are  constituted  as  at 
present.  Where  the  stockholder  has  his 
own  interests  to  protect  such  a develop- 
ment is  less  apt  to  happen  than  in  any 

[12] 


other  form  of  organization  that  society 
has  yet  been  able  to  discover. 

The  railroads  of  the  United  States 
evidence  clearly  this  situation.  The  pro- 
portion of  high-salaried  men  who  have 
risen  from  the  ranks  in  every  railroad 
in  the  country  is  amazing.  The  same 
thing  is  true  in  our  banking  and  financial 
institutions,  and  the  men  in  control  today 
are,  with  few  exceptions,  those  who  have 
started  in  mediocre  positions.  In  every 
industrial  organization  there  must  be  men 
to  plan  and  guide  it.  There  must  be  men 
who  buy  raw  material,  if  it  is  a manu- 
facturing organization,  and  men  who  sell 
the  finished  product.  There  must  be 
those  who  plan  to  make  both  sides  bal- 
ance with  a proper  profit  in  between. 
Different  kinds  of  ability  are  required  to 
fill  different  kinds  of  positions,  and  human 
judgment  is  applied  with  all  the  success 
of  which  it  is  capable  to  put  the  right 
men  in  the  right  places.  The  desire  of 
the  officials  of  a company  to  make  good 
to  their  stockholders  is  the  strongest  in- 
centive for  the  selection  of  the  most  cap- 
able men  for  their  assistants  that  is 
humanly  possible. 

Under  the  Russian  propaganda  work- 
men are  encouraged  to  take  over  the 
plants  in  which  they  work  and  run  them 
themselves.  Aside  from  the  question  of 
the  right  and  wrong  of  such  action,  about 
which  no  one  really  has  any  doubt,  comes 
that  of  efficiency  and  of  public  benefit,  for 
the  public  is  supposed  to  be  considered  in 
the  development  of  such  a situation.  All 
of  the  various  activities  of  an  industrial 
organization  so  taken  over  must  be  ful- 
filled, and  must  be  carried  out  by  men, 
and  the  only  difference  in  the  present 
system  and  that  advocated  by  the  Third 
International  lies  in  the  question  as  to 

[13] 


how  such  men  are  to  be  selected.  Under 
the  present  system  promotions  are  based 
upon  the  ability  to  accomplish  work  to 
be  done,  in  so  far  as  human  judgment  is 
capable  of  determining.  Under  the  pro- 
posed system  such  positions  are  to  be 
filled  theoretically  by  the  vote  of  the 
workers,  but  actually,  as  has  been  proven 
in  Russia,  by  those  who  have  failed  in 
practical  things  and  whose  only  success 
lies  in  ability  and  willingness  to  mislead 
the  people  through  their  passions. 

The  complete  breakdown  of  industry  in 
Russia  would  seem  all  that  is  necessary  to 
show  the  fallacy  of  the  plan  of  the  confisca- 
tion of  property  with  the  idea  that  it  could 
be  managed  by  the  confiscators  for  the 
greater  public  good.  That  with  all  their 
pretended  idealistic  theories  the  advocates 
of  this  policy  are  not  honest  in  their  pur- 
pose is  evident  to  all.  Do  they  wish  to  take 
over  land  as  such?  Not  at  all.  What  they 
wish  is  to  take  the  land  upon  which  other 
human  beings  have  spent  years  of  hard 
study  and  labor  in  bringing  to  a state  of 
effectiveness.  Do  they  wish  to  build  new 
factories  which  they  can  control  them- 
selves in  any  way  that  they  may  desire? 
No.  They  only  wish  to  take  over  factories 
which  represent  years  of  hard  work  as  em- 
bodied in  the  savings  of  the  stockholders 
and  the  energy  of  the  managements.  With 
all  of  their  pretended  criticism  of  capital, 
it  is  actually  capital  which  they  wish  to  ob- 
tain, and  not  through  any  orderly  process 
or  on  any  basis  of  right,  but  merely  through 
the  power  of  numbers. 

There  is  no  question  but  that  as  the 
world  develops  capital  and  labor  should  be 
brought  closer  and  closer  together,  and  that 
the  labor  in  an  industry  as  it  becomes 
competent  should  have  a greater  represen- 
tation in  the  things  which  affect  itself.  The 

[14] 


very  interests  of  capital  will  demand  it  as 
time  goes  on,  and  thousands  of  industrial 
organizations  are  constantly  aiming  to 
work  closer  and  closer  to  their  employees. 
One  of  the  greatest  difficulties  to  success  in 
such  attempts  lies  in  the  radical  agitator, 
who  considers  a peacefully-inclined  and 
happy  workman  a menace  to  his  own  in- 
terests. 

Upon  this  whole  situation  depend  the 
future  foreign  relations  of  the  United 
States.  For  instance,  in  Italy  we  find 
through  the  teachings  from  Russia  that 
workmen  have  confiscated  plants  on  no 
basis  of  right,  but  merely  because  their 
government  has  been  temporarily  cowed 
sufficiently  to  prevent  it  from  protecting  the 
owners.  While  this  condition  exists,  even 
though  Italy  has  vast  industries  run  by  men 
of  ability  and  integrity  to  which  credit 
could  safely  be  extended  by  peoples  in 
other  countries,  at  the  moment  it  is  neither 
safe  nor  desirable  to  advance  credits  to  this 
country.  If  a group  of  workmen  refuse  to 
recognize  the  rights  of  their  neighbors  who 
are  stockholders  in  an  industrial  plant,  why 
should  anyone  expect  them  to  recognize  the 
rights  of  foreign  creditors  who  might  ad- 
vance them  raw  material.  Their  very  ac- 
tions state  clearly  that  they  are  either  dis- 
honest or  do  not  believe  in  recognizing  the 
rights  of  creditors,  and  in  either  case  they 
have  no  ground  upon  which  to  make  a claim 
for  credit.  As  soon  as  the  misled  workmen 
in  Italy  see  their  fault,  and  the  government 
again  sees  the  necessity  of  protecting  those 
who  have  built  up  Italy’s  industries,  Italy 
will  receive  the  help  which  her  naturally  in- 
dustrious citizens  have  a right  to  expect. 
This  whole  unfortunate  development  in 
Italy  is  the  outgrowth  of  the  vicious  propa- 
ganda of  Pandoric  Russia. 

We  must  expect  that  until  the  Russian 

[15] 


tyranny  has  been  destroyed  every  radical 
agitator  who  is  being  supported  by  its 
propaganda  and  its  funds  will  continue  to 
be  able  to  control  large  masses  of  men. 
When,  however,  the  people  in  Russia  con- 
trol, and  a real  government  is  set  up,  the 
forces  for  evil  now  rampant  in  the  world 
will  lose  their  power. 

The  foreign  relations  of  a country  are 
political  and  commercial.  Politically  we 
have  no  real  position  throughout  the  world 
that  is  not  due  to  our  great  commercial 
power.  We  have  never  taken  our  inter- 
course with  other  nations  seriously  enough, 
and  we  allow  domestic  politics  to  control 
foreign  policies.  This  is  perhaps  natural 
in  so  young  a nation,  but  it  is  none  the  less 
necessary  that  we  outgrow  it.  Our  repre- 
sentatives to  other  nations  of  the  world 
should  be  men  trained  in  practical  history 
and  business  theory.  They  should  be  men 
of  integrity  and  understanding,  and  they 
should  be  so  separated  from  domestic  poli- 
tics that  their  only  fear  of  displacement 
would  lie  in  the  exercise  of  bad  judgment 
on  their  own  part.  Their  positions  should 
be  so  assured  that  they  would  feel  that  any 
attempt  to  manipulate  foreign  policies  for 
the  benefit  of  domestic  politicians  would  re- 
act against  them.  The  United  States  of 
America  should  have  a foreign  office  built 
up  for  the  good  of  the  country  and  the 
world,  and  not  for  that  of  any  political 
party. 

Our  present  system  under  which  our 
representatives  in  foreign  countries  are  so 
often  chosen  for  the  purpose  of  paying  off 
political  debts  in  large  measure  has  pre- 
vented the  United  States  from  being  able  to 
carry  out  the  good  that  the  naturally  fine 
ideals  of  its  people  would  otherwise  ac- 
complish. 

Commerce  is  so  influenced  for  good  or 

[16] 


bad  because  of  our  political  relations  that 
it  would  seem  in  order  for  the  American 
Bankers  Association,  the  United  States 
Chamber  of  Commerce,  the  National 
Foreign  Trade  Council,  and  possibly  other 
manufacturing  and  commercial  associa- 
tions, to  appoint  a joint  committee  to  pre- 
pare a system  for  selection  and  training  of 
our  diplomatic  force  that  could  be  recom- 
mended unanimously  by  all  to  Congress  for 
enactment  into  law. 

Commercially  the  United  States  is  in 
a most  trying  position  in  its  relations  with 
the  other  countries  of  the  world.  Our 
goods  are  demanded  and  needed  by  those 
who  cannot  pay,  and  our  requirements 
can  only  be  filled  by  those  countries 
which  do  not  need  enough  from  us  in 
return  to  cover  their  cost.  During  the 
war  we  increased  our  capacity  to  produce 
in  many  lines,  for  which  we  have  no 
sufficient  output  at  present.  Government 
regulation  made  necessary  during  the  war 
has  disturbed  all  the  natural  currents  of 
the  world's  trade,  and  destruction  in  the 
battle-scarred  countries  has  reduced  pro- 
duction in  them,  and  at  the  same  time 
increased  their  requirements.  These  con- 
ditions are  represented  in  the  rates  for 
foreign  exchange,  which  are  the  barom- 
eters of  commerce.  It  is  just  as  futile 
to  endeavor  to  restore  trade  to  a normal 
condition  by  trying  to  fix  or  stabilize 
exchange  rates  as  it  is  to  heat  a house 
by  putting  a candle  under  the  bulb  of  a 
thermometer. 

Theorists  have  stated  that  the  inflation 
in  European  currencies  has  been  the  sole 
cause  of  the  depreciation  of  the  foreign 
exchanges.  While  such  inflation  has  had 
its  influence  upon  the  exchanges,  and 
will  continue  to  do  so,  yet  another  ab- 
normal condition,  which  has  so  far  shown 

[17] 


too  little  improvement,  has  had  much  to 
do  with  the  exchange  rates,  and  has 
played  its  part  in  further  increasing  the 
inflation  which  existed  at  the  time  of  the 
armistice.  This  condition  is  the  absolute 
need  in  certain  European  countries  for  a 
greater  import  for  consumption  than  they 
have  ability  to  produce  for  export  in 
equivalent  value.  Under  such  a condition 
all  questions  of  price  are  subordinated  to 
necessity.  Such  price  changes  in  com- 
modities as  may  be  caused  by  inflation, 
therefore,  do  not  cover  the  whole  problem. 

The  ideal  way  to  correct  this  situation 
would  be  to  have  the  populations  in  every 
European  country  import  only  necessi- 
ties, and  endeavor  through  their  own  pro- 
duction to  reduce  the  quantity  of  such 
necessities  to  a minimum,  and  at  the  same 
time  increase  their  exports.  While  this 
would  have  a tendency  to  temporarily 
slow  up  the  world’s  trade,  yet  when  it 
had  once  recovered  it  would  be  in  a far 
healthier  condition,  and  many  nations 
would  not  be  paying  tribute  to  other 
countries  in  the  form  of  annual  interest 
to  a burdensome  extent. 

Where  foreign  borrowings  can  be  used 
for  internal  development,  such  as  was 
true  in  the  United  States  until  1914,  the 
interest  that  is  paid  to  foreign  countries 
in  which  securities  are  floated,  either  gov- 
ernmental or  industrial,  is  not  harmful. 
On  the  other  hand  where  such  loans  are 
incurred  and  the  proceeds  are  consumed, 
if  carried  too  far  an  element  of  danger 
is  introduced  that  is  apt  to  react  upon 
both  the  borrowing  and  lending  countries. 

It  is  on  this  account  that  any  scheme 
such  as,  for  instance,  an  International 
Clearing  House,  which  might  result  in 
making  it  easier  for  nations  which  are 
already  importing  more  than  they  can 

[18] 


afford  to  increase  their  imports,  would 
only  aggravate  the  difficulties.  It  would 
seem  as  though  an  International  Clearing 
House,  if  ever  needed,  should  be  estab- 
lished during  times  of  normal  trade,  when 
balances  for  a time  at  least  would  flow 
back  and  forth  rather  than  constantly  in 
one  direction.  It  must  not  be  forgotten 
that,  after  the  contribution  of  any  nation, 
or  nations,  to  a Clearing  House  fund 
was  dissipated,  if  operations  continued 
to  have  the  same  trend  the  countries 
with  preponderant  exports  would  have 
to  advance  the  funds  to  carry  the  trade, 
exactly  as  if  there  were  no  Clearing 
House.  If  on  the  other  hand  through  the 
establishment  of  an  International  Clear- 
ing house  it  were  found  possible  to  create 
a new  form  of  security  backed  by  many 
nations,  that  would  be  absorbed  by  the 
public  from  savings,  it  might  have  some 
real  value,  always  provided  the  regula- 
tions were  such  that  non-essential  im- 
portations (meaning  a greater  amount  of 
essentials  than  is  necessary,  as  well  as 
strictly  non-essential  commodities)  could 
not  be  obtained  by  countries  unable  to 
pay  for  them. 

The  necessity  of  the  world  at  the  mo- 
ment does  not  lie  so  much  in  the  creation 
of  new  methods  of  settlement  of  balances 
as  in  the  resumption  of  integrity  of  pur- 
pose on  the  part  of  all  peoples.  Safety 
in  banking,  and  in  fact  the  life  of  banking, 
depends  upon  a recognition  of  the  rights 
of  property  on  the  part  of  those  who 
would  borrow,  and  upon  such  others  as 
the  borrowers  may  themselves  have  to 
depend. 

If  the  bankers  in  the  United  States 
refuse  to  loan  to  those  who  would  destroy 
capitalism  through  repudiation  or  con- 
fiscation, or  who  are  subject  to  others 

[19] 


who  would  do  so,  it  is  not  a threat  to 
endeavor  to  force  belief  in  capitalism,  but 
merely  recognition  of  the  fact  that  bank- 
ing cannot  be  carried  on  with  those  who 
do  not  accept  their  obligations  to  the 
bankers  with  the  full  intention  to  pay, 
even  as  the  bankers  themselves  accept  full 
responsibility  for  the  return  of  deposits 
when  taking  them. 

It  is  the  province  of  the  banker  to  loan 
against  raw  materials  over  a period  of 
manufacture,  and  it  is  one  of  the  im- 
portant and  necessary  links  in  the  chain 
of  production,  but  if  workmen  take  over 
a plant  which  does  not  belong  to  them 
merely  because  they  have  the  power  of 
numbers  to  do  so,  their  very  act  renders 
them  unfit  to  ask  for  credit  to  enable 
them  to  purchase  raw  material.  They 
could  not  consistently  ask  for  credit  in 
any  event,  as  their  promise  to  pay  could 
only  be  given  in  direct  opposition  to  their 
professed  principles.  When  men  commit 
sabotage,  and  do  not  give  a full  day's  work 
in  return  for  their  wages,  they  also  en- 
danger the  credit  standing  of  the  concerns 
for  which  they  work  to  the  full  extent 
of  such  operations. 

The  rebuilding  of  destroyed  Europe 
would  have  presented  no  difficult  problem 
whatsoever  if  all  men  were  honest,  but 
when  to  the  natural  frailty  of  humanity  is 
added  the  tremendous  destruction  of  moral 
force,  which  has  affected  every  country  in 
the  world,  the  problem  has  been  made  too 
difficult  to  solve,  except  over  a long  period, 
during  which  millions  of  unfortunate  people 
have  to  suffer.  Integrity  in  production 
would  not  only  have  made  the  extension  of 
credit  a simple  matter,  but  it  would  have 
resulted  in  an  increased  production  which 
would  have  brought  the  necessity  for  credit 
within  such  limits  that  it  could  easily  have 

[20] 


been  met  from  the  savings  of  the  people. 
The  currency  inflation  which  has  gone  on 
in  Europe  since  the  armistice  need  not  have 
occurred,  and  the  budgets  of  the  nations 
could  have  balanced  instead  of  showing 
deficits. 

So  great  is  the  power  of  the  underworld 
force  at  the  moment  that  we  cannot  relax 
our  fight  against  it  for  one  minute,  if  we 
would  not  be  overwhelmed.  It  is  not  a 
struggle  between  capital  and  labor,  as  the 
agitator  would  have  labor  believe.  Instead 
it  is  a struggle  between  labor  and  capital  on 
the  one  hand,  and  those  who  would  make 
slaves  of  the  people  on  the  other. 

By  stealing  the  wealth  of  the  world,  and 
using  it  to  bind  labor  through  false  prom- 
ises, the  Russian  propagandists  hope  to  ob- 
tain the  autocratic  power  of  their  desires. 
Labor  and  capital  must  get  together  to  fight 
this  thing,  for  neither  can  survive  without 
going  through  a period  of  earthly  hell, 
even  as  has  Russia,  unless  integrity  of  pur- 
pose conquers  and  destroys  the  will  to  con- 
fiscate. The  union  of  capital  and  labor  in 
a fight  for  honesty  and  fairness  in  produc- 
tion, transportation  and  commerce,  would 
so  quickly  break  the  power  of  those  who 
cry  for  civil  war  while  pretending  to  op- 
pose all  war  that  the  world  would  leap  for- 
ward generations  instead  of  being  pre- 
cipitated backward  for  centuries. 

On  the  other  side  of  the  picture  we  have 
the  outstanding  integrity  of  the  two  great 
nations  who  only  last  week,  at  great  sacri- 
fice to  themselves,  repaid  the  American 
people  $500, 000, OCX)  which  had  been  ad- 
vanced to  them  in  the  time  of  their  great 
peril.  It  is  an  object  lesson  for  the  world 
that  is  certain  to  re-act  to  the  benefit  of  all 
mankind.  The  added  prestige  which  this 
act  will  give  the  peoples  of  these  two  great 
countries  among  all  other  nations,  coming 

[21] 


as  it  has  at  a time  when  the  world  is  full 
of  thoughts  of  repudiation,  is  certain  to 
have  a steadying  influence  on  all  interna- 
tional intercourse.  If  any  nations  have 
been  weak  in  their  thought  concerning  the 
question  of  meeting  their  foreign  obliga- 
tions when  they  mature,  the  payment  of  the 
Anglo-French  loan  is  sure  to  strengthen 
them,  and  they  will  see  that  it  is  worth  their 
while  making  any  effort  that  is  necessary  in 
order  to  do  so.  Even  the  Russian  people 
when  they  come  into  their  own,  as  they 
surely  will  in  time,  will  benefit  by  it,  and 
will  see  the  value  of  meeting  their  foreign 
obligations,  great  as  they  may  be. 

Today  Great  Britain  is  our  greatest  com- 
petitor in  the  markets  of  the  world,  but  she 
is  also  our  greatest  customer.  She  has 
won  her  way  as  a trader  in  all  lands,  be- 
cause of  the  inherent  honesty  of  her 
people.  We  are  prone  as  a nation  to  criti- 
cize Great  Britain  for  doing  the  things 
that  we  would  do  ourselves,  but  even  so  we 
both  have  common  ideals  and  a high  national 
sense  of  integrity,  and  the  world  will  be 
better  if  we  pull  together. 

France  at  the  moment  is  the  world’s 
leader  in  the  fight  against  the  annihilation 
of  the  obligations  of  man  to  man.  Her 
government,  acting  in  a sense  as  Trustee 
for  her  citizens,  is  making  known  to  Bol- 
shevik Russia  in  no  uncertain  terms  that 
the  money  which  France  loaned  to  Russian 
industries,  Russian  railroads  and  the  Rus- 
sian government  to  help  in  the  upbuilding 
of  that  country  must  be  returned,  and  that 
it  intends  to  protect  its  people,  and  the 
principle  of  the  integrity  of  an  obligation, 
at  all  costs. 

We  in  America  owe  much  to  these  two 
great  nations  for  the  staunch  protection 
which  they  afford  their  nationals,  and  can 
learn  much  from  them. 

[22] 


In  Belgium  there  has  been  a return  to  in- 
dustry which  has  impressed  all  those  who 
have  had  an  opportunity  to  see  it  develop. 
It  is  another  evidence  of  the  turn  of  the 
current  from  sabotage  to  sanity. 

Italy  at  the  moment  is  in  the  midst  of  an 
unfortunate  labor  complication,  but  we  can 
look  forward  hopefully  to  its  proper  so- 
lution, as  its  national  life  in  the  past  has 
spelled  industry. 

The  neutral  nations  of  Europe,  except 
Spain,  have  maintained  a high  standard  of 
industrial  integrity,  in  view  of  the  terrible 
forces  for  evil  with  which  they  have  been 
menaced,  and  that  their  peoples  are  all  na- 
tionally honest  seems  beyond  question. 

The  outcome  of  the  industrial  difficulties 
in  Spain  is  harder  to  determine,  although 
when  the  backing  of  Soviet  Russia  has  been 
taken  from  those  who  would  destroy 
Spanish  institutions,  the  situation  may  look 
different. 

The  Russian  example  is  seemingly  serv- 
ing a real  purpose  in  Germany,  in  that 
more  and  more  of  its  population  are  be- 
ginning to  see  that  disaster  would  come  to 
it  as  a nation  if  any  such  program  were 
followed. 

The  new  countries  between  Germany  and 
Austria  and  Russia  have  conducted  them- 
selves wonderfully  well  under  the  circum- 
stances, and  once  freed  from  the  Russian 
menace  some  worthy  nations  may  develop. 

The  great  needs  of  the  hour  for  the  com- 
plete restoration  of  Europe  are  three — the 
annihilation  of  Bolshevism  in  every  coun- 
try, the  fixation  of  the  German  indemnity 
to  the  Allies , and  the  reconstruction  of  de- 
vastated districts . 

With  Bolshevism  destroyed  production 
will  increase,  currency  expansion  will  de- 
crease, governmental  budgets  can  be  made 

[23] 


to  balance,  and  ultimately  taxation  can  be 
reduced. 

With  the  German  indemnity  fixed,  that 
nation  can  get  down  to  work  without  fear 
that  successful  operation  may  increase  her 
liability,  and  her  burden  will  begin  to  grow 
less.  At  the  same  time  the  payments  that 
she  must  make  will  serve  to  better  the  con- 
ditions in  the  countries  of  the  European 
Allies.  Such  help  as  Germany  may  fairly 
ask  from  the  rest  of  the  world  can  then  be 
extended  without  fear. 

With  the  reconstruction  of  the  devas- 
tated districts  productive  work  can  be 
given  to  many  men  who  are  at  present 
drawing  funds  from  governments  for  un- 
necessary purposes.  The  production  from 
the  reconstructed  mills  will  also  help  to  re- 
lieve the  pressure  of  want  to  a large 
degree. 

With  these  three  problems  solved,  all 
the  wars  now  going  on  in  Europe,  and 
the  tremendous  tax  that  is  being  put  upon 
the  people  for  military  purposes,  includ- 
ing the  loss  of  the  use  of  the  time  of  men, 
would  pass. 

The  great  part  of  the  United  States  at 
the  moment  lies  in  using  every  force 
possible  to  uphold  the  American  work- 
men who  have  successfully  withstood  the 
fallacious  arguments  of  the  false  agitator, 
and  help  them  educate  the  foreign  work- 
ers in  our  midst  who  have  not  been  so 
fortunate.  We  must  also  further  trade 
with  all  of  the  nations  of  the  world  in 
every  safe  and  judicious  manner  that 
opens  up  to  us. 

Many  of  the.  bankers  of  our  country 
have  been  given  new  powers,  under  which 
they  are  able  to  take  a part  in  our  foreign 
trade.  Their  co-operation  is  most  de- 
sirable, but  the  attention  of  every  banker 
in  the  country  is  called  to  the  necessity 

[24] 


of  using  these  new  powers  for  foreign 
trade  intelligently  and  honorably  if  we 
would  not  bring  criticism  upon  ourselves. 
It  must  be  realized  that  irrevocable  Let- 
ters of  Credit  when  once  issued  cannot  be 
broken,  regardless  of  falling  prices  or 
difficulties  which  may  come  to  those  for 
whom  the  Letters  have  been  issued, 
except  in  special  cases  where  there 
is  positive  breach  of  the  contract  of  the 
Letter  of  Credit  itself.  Refusal  of  drafts 
drawn  against  Letters  of  Credit  on  mere 
technicalities,  in  order  to  get  out  of  bad 
deals,  should  never  be  allowed.  The 
terms  and  conditions  under  which  Com- 
mercial Letters  of  Credit  can  safely  be 
issued  should  be  so  well  known  to  those 
carrying  on  such  operations  that  irre- 
vocable credits  are  never  issued  against 
loose  contracts.  With  prices  of  many 
commodities  falling  as  they  have  been 
recently,  and  are  certain  to  do  in  the 
future,  this  is  particularly  important. 

In  some  foreign  countries  it  has  un- 
fortunately been  the  habit  of  certain 
classes  of  exporters  and  importers  to  re- 
pudiate contracts  when  prices  have  gone 
against  them.  In  the  case  of  exports 
shipments  have  not  been  made  when 
prices  were  rising  within  time  limits  in 
order  to  allow  Letters  of  Credit  to  lapse, 
and  when  prices  are  falling  unfilled  con- 
tracts which  have  expired  have  been  filled 
and  manipulation  of  documents  under- 
taken with  the  intent  to  bring  the  ship- 
ments inside  of  agreements.  When  Com- 
mercial Letters  of  Credit  are  issued  by 
American  banks  for  imports,  the  contract 
between  the  importer  and  the  exporter 
cannot  properly  be  brought  in  by  the 
American  bank  for  the  purpose  of  revok- 
ing a confirmed  credit  which  has  been 
exercised  in  exact  accordance  with  its 


terms.  In  case  of  breach  of  contract  the 
importer  may  have  cause  of  action  against 
the  exporter,  but  a banker’s  confirmed 
credit  cannot  be  violated  if  its  terms  have 
been  fulfilled. 

One  reason  why  London  has  held  its 
position  as  the  central  money  market  of 
the  world  has  been  due  to  the  fact  that 
British  bankers  have  never  repudiated 
their  credit  contracts.  This  is  really  a 
more  serious  matter  than  is  generally 
understood,  for  if  foreign  bankers  find 
that  they  cannot  depend  upon  American 
bankers  accepting  drafts  drawn  under 
Commercial  Letters  of  Credit  issued  by 
them,  it  will  not  only  prevent  them  from 
buying  drafts  drawn  upon  banks  where 
acceptance  has  been  refused,  but  it  will 
cause  them  to  discriminate  against  all 
dollar  acceptances,  which  would  be  a most 
serious  setback  to  the  growth  of  Ameri- 
can banking. 

Our  relations  with  South  America  and 
the  Far  East  have  been  greatly  strength- 
ened since  the  war.  It  is,  however,  be- 
coming very  difficult  for  us  to  finance 
such  operations  because  having  debit  bal- 
ances which  we  cannot  settle  with  Euro- 
pean credits  necessitates  gold  shipments, 
and  at  a time  when  our  reserve  require- 
ments are  almost  at  their  peak.  Ex- 
porters and  importers  have  been  some- 
what concerned  about  the  development  of 
this  situation,  but  it  is  impossible  to  pre- 
vent while  high  prices  exhaust  our  bank- 
ing capital  and  at  the  same  time  we  are 
exporting  to  Europe  against  a balance  in 
credits  in  large  amounts.  It  is  just  as 
important,  therefore,  for  our  trade  with 
South  America  and  the  Orient  that  we 
reach  a position  where  current  trade  and 
invisible  balances  with  Europe  more 
nearly  offset  each  other,  as  it  is  to  our 

[26] 


money  market,  for  they  are  of  necessity 
closely  bound  together.  Our  whole  world 
relationship  demands  in  no  uncertain 
terms  that  orderly  production  be  resumed 
in  every  country. 

We  are  apt  to  be  frightened  by  the  vast- 
ness of  the  figures  which  represent  gov- 
ernmental indebtedness  today,  and  talk  of 
the  bankruptcy  of  nations  is  often  heard  in 
high  places.  While  there  is  no  question  as 
to  the  seriousness  of  the  situation,  yet  it 
must  not  be  forgotten  that  there  is  a real 
relationship  between  the  power  to  destroy 
and  the  power  to  create  on  the  part  of 
human  beings.  As  the  world  has  pro- 
gressed the  ability  of  man  to  produce  has 
increased,  and  in  each  period  of  war  the 
power  to  destroy  has  been  in  proportion  to 
it. 

Eliminating  the  question  of  waste  which 
follows  all  governmental  operations,  the 
whole  indebtedness  of  all  of  the  nations 
taking  part  in  the  war  up  to  the  time  of 
the  armistice,  and  in  fulfilling  contracts 
which  had  been  undertaken,  has  gone  to 
pay  for  production  accomplished  during 
the  four  years  of  the  war  and  in  payment 
for  the  time  of  the  men  engaged  in  it.  If 
it  had  not  been  for  the  ability  of  the  people 
to  produce  at  high  speed,  it  would  have 
been  impossible  for  such  indebtedness  to 
have  been  created.  To  the  increased  in- 
debtedness of  nations  since  the  war  started 
must  be  added  the  destruction  of  property 
in  the  devastated  regions  and  the  loss  of 
human  life.  The  rebuilding  of  the  devas- 
tated regions  is  only  a matter  of  a few 
years  at  most  with  present  powers  to  pro- 
duce. There  is,  of  course,  no  question  but 
that  in  time  of  peace  with  the  war  pres- 
sure removed  it  would  take  more  than  four 
years  to  produce  the  same  quantity  of  com- 
modities that  were  created  during  the  war 

[27] 


period.  On  the  other  hand,  many  of  the 
machines  and  methods  invented  during  the 
war  were  not  available  for  use  until  the  war 
had  nearly  run  its  course,  and  they  will  all 
add  to  the  ability  of  the  world  to  produce 
from  now  on. 

Again,  it  is  not  necessary  to  reproduce 
the  munitions  and  engines  of  war  which 
cost  such  tremendous  sums,  but  instead  the 
indebtedness  created  can  be  paid  off  from 
the  proceeds  of  useful  production,  which 
immediately  lends  itself  to  further  construc- 
tion. 

The  material  loss  to  the  world,  therefore, 
is  not  of  such  moment  as  it  would  seem, 
even  though  governmental  indebtedness 
was  incurred  during  a time  of  a high  aver- 
age of  prices;  consequently  if  no  destruc- 
tion of  human  life  had  taken  place,  and  no 
destruction  of  the  moral  forces  of  the 
world,  we  would  need  have  little  concern 
about  the  future.  But  with  millions  of  the 
best  and  healthiest  minds  of  the  world  gone 
forever,  and  great  numbers  of  misguided 
individuals  endeavoring  to  stir  up  civil 
wars,  the  real  menace  for  the  future  would 
seem  to  lie  principally  in  the  difficulty  of 
the  restoration  of  moral  force.  It  is  on 
this  account  that  it  seems  essential  that  we 
give  more  of  our  attention  to  this  phase  of 
the  matter. 

Upon  our  success  in  re-establishing  in- 
tegrity of  purpose  depends  our  ability  to 
help  in  the  restoration  of  a proper  financial 
relationship  between  the  nations,  without 
which  an  orderly  world  is  inconceivable. 
To  accomplish  this  will  require  the  exercise 
of  the  full  power  of  our  national  ideals.  We 
must  co-operate  with  the  strong  to  help  the 
weak. 

Our  intercourse  with  other  peoples  must 
be  based  on  fairness  and  goodwill.  Our 
minds  must  be  free  from  petty  jealousies 

[28] 


and  filled  with  that  hope  which  conquers 
despair.  The  opportunity  of  all  history  has 
opened  before  us.  Can  the  country  of 
Washington  and  Lincoln  fail  in  such  a 
crisis?  It  is  unbelievable.  Mistakes  we 
will  make,  but  if  we  stand  firmly  against 
the  forces  for  evil  which  would  destroy 
our  institutions,  our  example  will  go  far 
toward  helping  the  stricken  nations  of 
Europe  to  recover  their  morale.  With  all 
peoples  united  in  their  determination  to 
bring  order  out  of  the  present  chaos,  we 
need  have  no  fear  of  the  vast  indebtedness 
and  the  extended  currency  inflation  which 
exist  today.  They  will  disappear  before  the 
combined  energy  of  the  world,  if  it  is  exer- 
cised with  integrity  of  purpose,  like  mists 
before  the  wind. 


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